Groupon: role model for startups using cloud computing

Mashable.com had an excellent article: How Groupon uses the cloud to scale its business. I'm sure there are other startups who've done it, but Groupon is one of the most prominent businesses that have made cloud computing a core part of its strategy from the beginning.

We certainly live in an exciting time. The resources once exclusive to major corporations are increasingly becoming available to small businesses. Google and Amazon have been leading that change, offering more services so that startups can scale up fast.

This wasn't possible even just a few years ago. In 2006, there was an article in BusinessWeek called Valley Boys that mainly focused on Digg.com. There was a vivid scene early on that described the tension of launch day. Anxious engineers hunched over screens, looking at site traffic. When the user submissions spiked way above projections, the place erupted into chaos. Staffers screamed orders at each other and rushed to bring more servers online.

Nowadays, more bandwidth can be allocated in a keystroke or mouse click. When the hacker group Anonymous tried to shut down Amazon.com in a DDOS attack, they found that the e-retailer's massive capacity made it nearly invulnerable. It literally was "too big to fail": Why 'Anonymous' failed to take down Amazon over WikiLeaks. That must have been reassuring news to customers of Amazon Web Services (AWS).

In the case of cloud computing, it's a good thing for startups to have a Big Brother.

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Cameron, thanks for chiming in to provide that figure. Wow, $50,000 is a lot these days. I remember being stunned the first time I saw the pricing for Amazon S3. It was almost the same cost per gigabyte as an external hard drive, except with world-class tech support.

Lately, it seems like there's been a backlash against accepting venture capital. 37signals and Y Combinator are some of the most vocal proponents of bootstrapping startups.